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Scientists with USDA's Agricultural Research Service (ARS) have found that barley grain can be used to produce ethanol, and the leftover byproducts—barley straw, hulls, and dried distillers grains (DDGS)—can be used to produce an energy-rich oil called bio-oil. The bio-oil could then be used either for transportation fuels or for producing heat and power needed for the grain-to-ethanol conversion.

ARS is USDA's principal intramural scientific research agency, and these results support the USDA priority of developing new sources of bioenergy.

In the lab, a kilogram of barley straw and hulls yielded about half a kilogram of bio-oil with an energy content of about half that of No. 2 diesel fuel oil. The energy content of bio-oil made from barley DDGS, including DDGS contaminated with mycotoxins, which can't be used to supplement livestock feed, was even higher, about two-thirds of the level in No. 2 diesel fuel oil. However, the bio-oil was more viscous and had a shorter shelf life than bio-oils produced from straw or hulls.

The process also created a solid byproduct called "biochar" that might improve the water-holding capacity and nutrient content of soils. Amending soils with biochar can sequester carbon in the soil for thousands of years.

Farmers in the Mid-Atlantic states and the Southeast could cash in on the production of winter barley cover crops while continuing to raise corn and other food crops in the summer. Growing winter barley for biofuel production would also help reduce soil erosion and nitrogen leaching, a major concern for farmers in the Chesapeake Bay watershed.